Why Roland Berger is the Strategy Firm to Watch

Is Charles-Edouard Bouée, the new Roland Berger CEO, the world’s bravest consulting CEO?

Editorial

Imagine you are the CEO of a major global consulting firm with some unique challenges defining your tenure.

You were elected CEO a mere 3 months ago as the first foreigner to ever lead the firm.

Your election marked the end of a tumultuous period where the firm considered selling itself.

You are leading the business through a restructuring.

You and your firm are still building a brand in the important USA market.

Beyond managing the firm, you retain responsibility for the important Asia region.

Finally, you have not yet presented your strategy to the global partnership.

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Our editorials are read widely, including within the leadership of the major consulting firms. We know this because some firms write to us. These critiques may be hard to read but they have the sincere purpose of helping the firms improve. The history of management consulting is one of many great firms that either failed and/or were unable to survive as independent concerns, or were tainted by scandal. As you read this the firms are constantly making decisions, some of which may lead to the same fate.

Rather than getting upset about these pieces, it may be more useful to think about the real problems we discuss and how you can play a role in fixing them. It is not healthy for you to assume the firms are perfect nor are we attacking the firms by pointing out their areas for improvement. Other case interview preparation services choose to avoid these topics because it hurts their business. Our clients go on to join all these firms. We hope they take a hard look at what they find and try to make the firms even greater than they currently are.

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That sounds like a pretty full plate with many moving parts, a lot at risk and no guarantees of success. The last thing you would want is to rock the boat or introduce any uncertainty that could damage morale. In a profession defined by maintaining an ironclad control of image, most in Bouée’s place would be convinced that anything that had even the slightest probability of damaging Roland Berger’s image should be avoided.

In late September, in the thick of the situation above, this publication announced our upcoming Global Consulting CEO Rankings. Moreover, although we had rankings going back 9 months using a sample of anonymous Roland Berger partners, we requested the opportunity to poll every single partner in Roland Berger under some tough non-negotiable conditions for the firm.

We insisted that Roland Berger would have no oversight of the polling process, no opportunity to review the results or analyze the findings, receive no summary before we publish the findings, and finally, we would offer no clues into how each partner voted. We did, however, ask the firm to encourage their partners to participate.

Indeed, this seemed like just the initiative Bouée should be avoiding. There was too much at stake and he would be forgiven for passing up the opportunity. The risks far outweighed the returns, especially given our tendency to publish fact-based and investigative editorials which explore the painful challenges faced by consulting firms: Roland Berger, Bain, BCG, McKinsey, Deloitte S&O and PwC Strategy&.

In fact, we published the Bouee editorial a week before we ran the partner poll. Therefore, there was no doubt about how brutally honest our analyses could be.

This was the biggest possible risk for this new, young and energetic CEO. If the majority of his partners voted him down, he would have effectively lost his mandate to execute any change across the business. In fact, even before he presented his pending strategy, a weak showing in the CEO Rankings would raise doubts about his ability to galvanize and mobilize the firm. He had to do well or it could seriously hurt confidence his leadership.

And given the tight timeline under which we were running the polling, there was no time for Bouee to canvas support across the organization.

Remarkably, given the circumstances and what was at stake, Roland Berger agreed to the poll in less than 36 hours. While we fully anticipated them to agree, we at least expected Roland Berger to delay the poll by a month or two to ensure they had time to discuss it with their partners and square away the votes. It would have been so easy to take that delayed safe route. Roland Berger didn’t, but other participating firms asked for this.

Moreover, by participating in the poll, Roland Berger was effectively endorsing the results. They could not distance themselves from the results of a poll they had agreed to accept.

This is the equivalent of a Premier, Chancellor, Prime Minister or President agreeing to a snap-referendum in 24 hours. He or she has no conceivable way of knowing how the vote would go and while the outcome is not binding, it can inflict spectacular damage to a leader’s credibility.

If Roland Berger’s Charles-Edouard Bouée was a gambling man, he had just bet everything on one hand. He was betting that by not canvassing for votes and going with a public poll, the partners would value that sincerity and endorse it in a public show of support.

It was a big gamble.

Between 29th September and 1st October 2014, Firmsconsulting independently ran the poll. Roland Berger, like every other participating firm, had no input into the questions, running of the poll or even the analyses. They were completely kept away to preserve the integrity of the results.

One hundred and fifty-four Roland Berger partners worldwide completed a questionnaire to rank Bouée’s performance, leadership and strategy. That is an unprecedented 80% participation rate of all partners worldwide. Partners from every single Roland Berger office participated in the global polling.

That partner participation rate is three times as high as the next highest consulting firm.

We knew the results on 1st October 2014 but did not disclose them to Roland Berger. We still needed to verify the identities of each partner submitting a vote to ensure everything was valid and audit the results.

By 6th October 2014 we had finished all the checks and all the other participating firms had completed their voting. We knew the results but only shared the basic details with long-time Firmsconsulting clients, as reward for their contributions.

Charles-Edouard Bouée may very well be a gambling man, but he is a winning gambling man. He won by a stunning margin.

Bouée received a sweeping mandate by scoring an all time high of 89.9% out of a possible 100%. This means that out of the 154 Roland Berger partners who voted, he was given an average score of 89.9 where 0 signifies 0% support and 100 signifies unanimous support. For comparison, that is 28% more than the 62% Bechek of Bain and Barton of McKinsey received, and 16% more than the 74% that Lesser of BCG received.

While we will continue to critically assess the strategies and performance of the firms and their leadership, we must also recognize outstanding leadership, results and performance.

While Roland Berger will face challenges just like every other consulting firm, its global partnership is working together like a herd of buffalo, head down and moving resolutely in one direction with commitment, energy and focus. That is a formidable competitive advantage to have.

Bouée’s quick decision of immediately endorsing the poll, throwing in his hat and standing by his convictions is what made the difference in the vote. He believed the exercise would be valuable, he trusted the results would be useful no matter which way it went and this willingness to see the truth for what it was paid off immensely.

The risk of what he did was enormous. While other consulting firms have formally participated in this ranking, none have been as hands-off as Roland Berger nor have they had such a high participation rate.

Context

Let us place the risk in context. When I was a partner back in the days, we had appointed a regional leader who convened a get-together for all the associates, engagement managers, principals, directors, researchers and support staff for that region. Over 500 consultants from across the regional offices were brought together to network, mingle and learn about his strategy. At this time, I was a relatively junior partner so it was interesting to see how the new leader would run the region.

Everyone was asked to bring along his or her smartphones. The new director arranged a Q&A led by a fiery and very popular business reporter. This lady was not known for taking any prisoners in her interviews. So the day begins with the usual talks, business updates and even some clients attended to discuss their view of the firm. The keynote event was the 45-minute hot seat session where this lady just rammed in.

Polite and petite, she was also a piranha. She asked tough and pointed questions which were clearly not pre-planned. She veered into the ambitious strategy the leader had put together and wanted to know if he was being realistic.

The leader said something along the lines of, “…and if anyone feels I am pushing this practice too far and too fast I have always urged them to speak to me and we will make the necessary changes.”

“Are you willing to stand by that and do a simple poll?” asked the reporter.

“Yes.” Responded the partner.

“If you are sure of that, let’s find out,” was her response as she proceeded to flash a number up on the screen and asked everyone in the room to either SMS a ‘1’ or ‘0’ to the number. They would SMS a ‘1’ if they supported the strategy or a ‘0’ if they did not support the strategy. She promised it would be anonymous and none of the voting details would be shared with the consulting firm. It would be immediately erased after the poll.

It took all of 5 minutes to do this and see the results flash up on the screen in real-time. A whopping 71% of the consultants in attendance did not support the new leader’s strategy.

This result happened to a fairly well known director in a smaller region where he knew most people and at a time when the firm was doing very well. He was also a very popular director who would not have been called unrealistic for assuming he had the support of the majority of people.

While the vote did not derail his strategy, it certainly punctured his morale, removed his assumed mandate and made it very difficult for him to implement the changes he needed to make. In fact, some of the key changes he wanted to implement never went through. That vote emboldened quite a few partners who wanted to challenge him but had previously assumed they were in the minority. And I would know because I eventually joined the team he assembled to help push through the strategy.

And to be fair, this was a far lower risk vote. It was private. It would never hit the media.

Bouée agreed to the poll under far riskier conditions. He had much more to lose.

While this vote says much about Bouée, it also says much about Roland Berger, it’s culture and the partnership. In most consulting firms, the public relations and marketing departments have two roles. They ensure the firm is in the media and they also block the firm from risky public initiatives. This was a risky public initiative since the outcome was not at all confirmed. Yet the senior partners and marketing department quickly supported the polling.

That demonstrates an incredible amount of faith in Bouée and the belief that the majority of partners do support him. They were willing to be very transparent about it. There are not many consulting firms who would allow this for a new CEO.

While the 89.9% endorsement is impressive, the mood at Roland Berger is also very different from what we are seeing in the rankings of Bain, BCG and other firms. To understand this mood, think of the last time you felt swept up into a great and inspiring mission that was worth achieving and bigger than you.

Maybe you joined a start-up or maybe you helped elect a great politician. Recall that cause that made you strive harder. Think of the great leader who crafted that vision and pulled everyone forward. Think of the excitement, energy and enthusiasm you felt going to work every day because what you where going to do mattered.

It probably was a magical time. It probably also was rare time because the odds are you only experienced something like this once in your life.

This is Roland Berger’s once in a lifetime institutional moment. This vote will define the firm and Bouée’s leadership.

The extensive quotes from the Roland Berger partners providing feedback creates the impression that the firm is poised to embark on some great journey.

It is amazing with how much energy Charles-Edouard brings to turning around the culture and confidence in our company. The New Roland Berger is a place I feel most comfortable to work at and I am proud to be a part of it.

The New Roland Berger with the principals given by CE Bouee of think:act in the interest of the clients will enhance the performance of the firm and recalibrate certain unfavorable developments of the past.

Charles Edouard is one of the most motivated and energetic CEO’s I have seen in my career, with clear leadership and also empathy.

There is a sense of higher purpose. There is a global sense of destiny at the firm where everyone is energized, inspired and believe that the best is yet to come. There is remarkable consistency between the comments of partners in Dubai, Rio, Stuttgart, London, and actually everywhere. They seem to truly believe that the firm is destined to deliver extraordinary things.

This sense of exceptionalism, the belief that Roland Berger is so special and unique that it can change things through its uniqueness, is a powerful tool.

In 1939, then CEO of P&G Richard Dupree said,

“You can take away all the buildings, you can take away all the brands, and P&G people will rebuild the company in a decade.”

Bouée has one thing better than Dupree. He has an incredibly aligned leadership team and will likely not need a decade to change management consulting, as we know it.

QUESTION/S OF THE DAY: Do you think it was brave of Roland Berger’s Bouée to allow an independent public audit of his popularity where he had so little control? Did Bouée’s decision impact the way you think about Roland Berger?

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Comments

4 responses to Why Roland Berger is the Strategy Firm to Watch

A little known fact is that we did count Roland Berger as part of the 4 major global consulting firms until 2010. In that year we took them off the list and our measurements when they began talks to be sold. They where being punished for that very bad decision.

We will see if they will be included as we roll out the rankings for the firms.

One of the ways we get significant participation in our surveys is to force deadlines. It is a well known phenomenon where users are generally more likely to react where there is a deadline. They tend to value the sale, survey or offer more for some reason.

On the part of being thoughtful, you are right, but it does not change the headline. Bouee may have been more thoughtful than he was brave, but he was still more brave than any other CEO. They are mutually exclusive points. Most firms wanted, and got, weeks of delays before they participated.

I think Barton does not support the poll due to his pretty bad performance, as measured by his peers, and McKinsey’s general unwillingness to participate in any rankings. Still, we have a very high participation rate from McKinsey directors. As you say, McKinsey probably knows the CEO would not do well in this poll.

The response rate is amazing, I wish I had similar rates for the surveys I run.

I’m surprised you gave only 2 full days for survey respondents [Sept 29-Oct 1]. It looks as a very short time frame, isn’t it?

I totally applaud Bouée, though I would argue that he could have been very thoughtful than merely brave. If RB has the culture of openness, with partners coming and freely discussing a strategy with CEO, Bouée probably expected favorable survey results. Plus, they could be doing such polls internally or partners were involved when Bouée was developing his strategy, hence the outcome was more or less predictable and partners were likely to support the strategy since they had an input. I’m not saying though that he wouldn’t have agreed to run the poll if many partners didn’t support him.

I’m curious if it’s a brave and right thing to do – accept such public polls – regardless of the situation. For example, for Roland Berger it could have made more sense and been safer to run such poll than for McKinsey when Barton de-facto communicated the changes to McKinsey through NYT article. Let’s abstract from the appropriateness of the strategy itself, if it was obvious that many partners [Europeans in particular] would disapprove the strategy would it be silly or brave thing for Barton to run public polls?

Thanks for revealing the attitude RB had towards the poll. It is encouraging to read something like that. Are you planning on including placements of your clients with RB to the same category as placements with MBB? as, correct me if I’m wrong, at the moment Firmsconsulting is reporting 2 numbers, success with MMB, and overall success with consulting companies.